The first part of May has seen steep rises in both gas and power, in line with other indices, particularly oil and coal. The key driver across the piece is the decision of the US government to pull out of the Iran nuclear deal. It was felt that President Trump’s decision had already been built into oil costs, but the confirmation seemed to push the price higher, with Brent now flirting with the $80 mark. The threat of sanctions and the reduction of Iranian oil into the world market has obvious implications. The nervousness over Iran has also been reflected in the wider Middle East, following the problems in Gaza associated with the opening of the US Embassy in Jerusalem.

Closer to home, price increases have been driven by the discovery of cracks at the Hunterston B nuclear power station. Whilst cracks are routinely found as the ageing UK nuclear fleet is inspected, there are more than anticipated at site. This has led to fears that Hinkley B may also have issues as it was built to the same plan as Hunterston (this historically happened with Torness power station and its twin Heysham B).

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